FOR IMMEDIATE RELEASE: July 22, 2013
David Turnbull, email@example.com, 202-316-3499
New report exposes billions per year in additional fossil fuel subsidies
Master Limited Partnership tax avoidance structure dominated by fossil fuel industry
A new report released today by Oil Change International and Earth Track exposes a largely unaccounted for subsidy to the fossil fuel industry, valued at roughly $4 billion per year and growing. New analysis quantifies the value of tax avoidance by the fossil fuel industry through a corporate structure called “Master Limited Partnerships (MLPs).” Though eliminated for most US industries more than a quarter century ago, special rules protected eligibility for fossil fuels, and have allowed a growing range of oil and gas activities to escape corporate income taxes entirely.
The report, entitled “Too Big to Ignore: Subsidies to Fossil Fuel Master Limited Partnerships,” finds that the oil, gas, and coal sectors have increasingly dominated the MLP universe, now comprising well over three-quarters of the total. Existing estimates of the taxpayer costs associated with fossil fuel MLPs are deceptively low, reducing the pressure to end this tax break once and for all.
The report can be found here: http://bit.ly/FossilMLPs
MLPs, such as those created by Enbridge, Sunoco, and TransCanada, not only enable firms to escape corporate income taxes on profits, but also to delay most tax payments on distributions to partners by many years. As Forbes magazine has said, MLPs are an “income and a tax shelter rolled into one investment.”
The MLP structure, according to the new report, cost the US treasury as much as $13 billion in lost tax revenue between 2009 and 2012, a figure six times larger than previous estimates. Fossil fuel interests continue to convert to MLPs at an alarming rate through asset spin-offs, mergers, and by seeking expanded eligibility granted not only by Congress, but also through rather secretive IRS rulings.
“Not only does the U.S. oil boom imperil our communities and climate, but the increasing use of Master Limited Partnerships allows the industry to pay even less of its share of the taxes needed to support those same communities,” said David Turnbull, Campaigns Director of Oil Change International. “The fossil fuel industry is busy destroying our air, water, land, and climate, all the while finding new ways to avoid taxes.”
“Tax subsidies to fossil fuels through Master Limited Partnerships go against both the fiscal and environmental interests of our country, yet are repeatedly overlooked in most federal oversight reports on subsidies,” said Doug Koplow of Earth Track, the report’s author. “Though recent efforts have looked to expand Master Limited Partnership subsidies to some renewable energy resources, the evidence suggests that the fossil fuel sector will continue to capture the vast majority of the MLP subsidies even with an expansion. In the context of the climate crisis we face, the continuation of this subsidy to fossil fuels is inappropriate regardless of any potential benefits to new industries.”
View the report here: http://bit.ly/FossilMLPs